US Brewery Count Tops 3,000

Discussion in 'Beer News & Releases' started by Bitterbill, Jul 11, 2014.

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  1. Bitterbill

    Bitterbill Poo-Bah (7,075) Sep 14, 2002 Wyoming
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    Source: http://www.brewersassociation.org/insights/us-brewery-count-tops-3000/

    The American brewing industry reached another milestone at the end of June, with more than 3,000 breweries operating for all or part of the month (3,040 to be precise). Although precise numbers from the 19th century are difficult to confirm, this is likely the first time the United States has crossed the 3,000 brewery barrier since the 1870s. Wieren (1995) notes that the Internal Revenue Department counted 2,830 “ale and lager breweries in operation” in 1880, down from a high point of 4,131 in 1873.

    [​IMG]

    What does 3,000 breweries mean? For one, it represents a return to the localization of beer production, with almost 99% of the 3,040 breweries being small and independent. The majority of Americans live within 10 miles of a local brewery, and with almost 2,000 planning breweries in the BA database, that percentage is only going to climb in the coming years.

    Secondly, it means that competition continues to increase, and that brewers will need to further differentiate and focus on quality if they are going to succeed in a crowded marketplace. While a national brewery number is fairly irrelevant without understanding local marketplaces, 3,040 breweries could not happen without increased competition in many localities.

    What it does not mean is that we’ve reached a saturation point. Most of the new entrants continue to be small and local, operating in neighborhoods or towns. What it means to be a brewery is shifting, back toward an era when breweries were largely local, and operated as a neighborhood bar or restaurant. How many neighborhoods in the country could still stand to gain from a high-quality brewpub or micro taproom? While a return to the per capita ratio of 1873 seems unlikely (that would mean more than 30,000 breweries), the resurgence of American brewing is far from over.

    BA Brewery Definition: The Brewers Association brewery count is based on the number of brewing facilities actively selling beer in the marketplace. Inclusion in the count requires having a Brewers Notice from TTB and paying federal excise taxes on beer. In addition, this count only includes brewing facilities that are not counted as someone else’s facility (to prevent double-counting). This number does not include breweries in planning or alternating proprietorships, which may be included when only counting brewing licenses, nor does it count contract brewers, who do not have a Brewers Notice. Unlike the U.S. Census Bureau figures, which are based on NAICS codes (North American Industrial Classification System), it does count brewpubs and other breweries that engage in business activities beyond brewing, assuming they meet the criteria above.

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  2. SPLITGRIN

    SPLITGRIN Poo-Bah (1,917) May 13, 2003 Kentucky
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    The numbers all make my head spin as an old school BA. I have loved seeing all the new start ups build thier brand. We won't see the kind of per capita numbers unless we really change our view of supporting local business as a whole. I'm not gonne preach the death of big box and fast food but you know what I mean.
     
  3. Oktoberfiesta

    Oktoberfiesta Aspirant (283) Nov 16, 2013 New Mexico
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    I understand startups etc.. Does anyone have figures on recent closures? In the state of NM, I have seen a half dozen close up (or not even get fully started. even though they may have attended beerfests under their name brand).

    With competition so stiff, the success to fail ratio has to be high? Locally, I touch 3-6 breweries with 90% of my beer money. The other guys have to win me over officially.

    The graphic on the first post shows prohibition with ZERO (obviously). But I would love to see what we could be at if the common era breweries had stayed open. I understand the weeding out of "mediocre" products. But at the same thing, I'm interested in the true growth numbers
     
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  4. hopfenunmaltz

    hopfenunmaltz Meyvn (1,491) Jun 8, 2005 Michigan

    There are 1500+ in planning. Not all of those make it.
     
  5. jesskidden

    jesskidden Poo-Bah (1,969) Aug 10, 2005 New Jersey
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    Except there were legal, licensed breweries in the US all during the Prohibition era - they just could not sell beer with more than 0.5% abv. (Actually, in the early years of Prohibition, some of the still-running breweries were making full strength beer that was sold by prescription, but that, too, was soon prohibited).

    The American Brewing Industry and The Beer Market
    [1958], while noting that around 800 breweries closed in 1919, states that there were still 583 licensed breweries in the US in 1920, winnowed down to 231 a decade later ("near beer" never did catch on and sales went down throughout Prohibition).

    It was the 150-200+ (sources vary) still running breweries that allowed legal 3.2 abw beer to hit the market so soon after the passing of the Cullen Act in March that allowed beer to be available and sold in most states on April 7, 1933. Many simply didn't "de-alcoholize" the product they were already brewing.

    Line graphs of the number of US breweries show that the number of breweries had been going down since the 1870s (from over 4000 to around 1600 in 1910, before WWI and most state prohibition eras) while the average barrelage of breweries was climbing, for a number of obvious reasons. Connecting the line to skip the Prohibition era, and that's still a pretty steady drop in numbers until the Craft Era.

    [​IMG]
     
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  6. kelvarnsen

    kelvarnsen Devotee (423) Nov 30, 2011 Ontario (Canada)

    This is what I am wondering too. I mean interesting spin from the brewers association but how many of those 3000 brewers are producing really great beer, or at the very least trying something really different. I mean I live in Canada, and it is basically the same thing. When a new brewery opens up it is in some industrial park and it is producing an ok to decent blond ale/pale ale/IPA and/or stout. Sometimes it really surprises me that things like the crazy success of say Heady Topper or Founders (KBS and that sort of thing) aren't pushing more new breweries to really step up their game and try to make really awesome (not just good) beer.
     
  7. JohnnyHopps

    JohnnyHopps Poo-Bah (2,236) Jun 15, 2010 Indiana
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    At some point, the marketplace will level off. Breweries/brewpubs can't grow exponentially. I suspect that we are nearing a point where mediocre breweries start to disappear and some larger breweries scale back.
     
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  8. ASak10

    ASak10 Initiate (0) Jan 2, 2014 Colorado

    I cannot even fathom 89 breweries in the entire country, like in 78-79 (whatever year that is). I think 89 breweries opened in Denver just last week :grimacing:
     
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  9. jesskidden

    jesskidden Poo-Bah (1,969) Aug 10, 2005 New Jersey
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    Remember, too, that was the number of "breweries" - not brewing companies. There were less than 50 companies at some point in the late 70s, since a number of large brewing companies like AB, Schlitz, Falstaff, Heileman, Carling-National, etc., each were operating a half dozen or so breweries.
     
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  10. MNAle

    MNAle Poo-Bah (1,731) Sep 6, 2011 Minnesota
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    This graph, IMO, calls into question the "everybody knows fact" that prohibition was responsible for the elimination of the diversity of breweries. It is clear that the trend had been going on for 30 years (at least) prior to prohibition, and after it could be argued that those that did not survive prohibition may have shut down anyway as the trend away from local breweries continued.

    I suspect that the number during prohibition was not actually zero. Certainly, the number of breweries brewing beer legally was zero, and also the illegal alcohol trade during the time focused on spirits, as those were more efficient to deal with on the black market, but somehow I have to believe a small number of underground breweries existed. I have no facts to back this up.... it is just a notion based on likely human behavior.
     
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  11. ASTMONATE

    ASTMONATE Initiate (0) Apr 23, 2014 Illinois

    From what I've gathered, the Temperance Movement was certainly the cause of brewery decline in the years before prohibition went into effect. It's not as if Prohibition itself was just decided on and then all of the sudden America began to stop producing beer. Then once Prohibition ended, regulations were put in place to allow our buddies in the BMC to really capitalize on the peoples regained ability to enjoy beer again. So the number of competing breweries continued to decline well after the repeal much to the satisfaction of BMC.
     
  12. MNAle

    MNAle Poo-Bah (1,731) Sep 6, 2011 Minnesota
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    Actually, at the time, it would have been more like BMCHSPF! :wink:
     
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  13. jesskidden

    jesskidden Poo-Bah (1,969) Aug 10, 2005 New Jersey
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    If that was the case, why did per capita consumption of beer go from 5.2 gallons in 1870 to 20.2 gallons in 1915? Why did the largest brewery in the US in 1877, Geo. Ehret's Hells Gate Brewery, brew only 138,449 barrels yet by the first decade of the 20th century 3 brewers (AB, Schlitz and Pabst) would all break the "1 million barrels a year" mark? Why did average yearly barrelage per brewer increased from 3,000 in 1876 to 21,700 bbl. in 1900 and 47,000 in 1914?

    The number of US breweries dropping from over 4,000 in the 1870s to under 2,000 by the 20th century was more a factor of improved methods of modern, industrial brewing (refrigeration, pasteurization, automation, etc), improved transportation, etc. - factors common in many maturing mass industries.
     
    #13 jesskidden, Jul 11, 2014
    Last edited: Jul 11, 2014
  14. jesskidden

    jesskidden Poo-Bah (1,969) Aug 10, 2005 New Jersey
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    Well, here's a quote from a report after Prohibition Commission Haynes meet with a Congressional committee in 1925:

    Well, the breweries with permits to brew and market "cereal beverage" (aka "near beer" /less than 0.5% abv alcohol) brewed "real" beer and then "de-alcoholized" it by several different methods. Though illegal, some beer did get past the regulators.
     
  15. jesskidden

    jesskidden Poo-Bah (1,969) Aug 10, 2005 New Jersey
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    The era of "BMC" as the #1-2-3 (now, "1-2", of course) did not begin until 1990. While AB entered Prohibition as one of the largest US brewers, and, post-Repeal, traded places as #1 with Schlitz, and sometimes Pabst, into the 1950s, Coors and Miller were much smaller.

    As late as the post-WWII period, Miller barely made the US Top 20 (sometimes placing as the #4 Milwaukee brewer, behind Schlitz, Pabst and Blatz) brewing under 1m bbl.

    Coors, even smaller, was brewing under 400k bbl/yr and was the 65th largest US brewery, behind companies like Ortlieb, Gunther, Globe and Adam Scheidt.
     
  16. Crusader

    Crusader Disciple (306) Feb 4, 2011 Sweden

    Right. Virtually every country in the western world experienced a marked decline in the number of breweries over the span of the 1900s, whilst the average size and output of breweries increased exponentially. In the late 1800s Germany for example had some 26 000 breweries, Bavaria alone had over 5000. Today Germany has just over 1000 breweries. Sweden in the same time period had some 374 breweries, the outmost majority of which brewed lager beer (enough to where 170 different lager beer brands could be tested and analyzed as part of a 1892 governmental report on the brewing industry). Today Sweden has 4 remaining "heritage" macro breweries.

    The situation is very similar in other western European countries, where the market is either a virtual duopoly, or controlled by a handful of old established brewing companies (although in many countries there's a growing number of smaller up-starts, "craft breweries"). Prohibition has only been a factor in certain northern European countries, such as Iceland, Finland and Norway, yet the situation is similar to the US. Market consolidation as an economic force and driver worked independently of the presence or absence of prohibition.
     
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  17. ASTMONATE

    ASTMONATE Initiate (0) Apr 23, 2014 Illinois

    Immigration?
     
  18. WTKeene

    WTKeene Initiate (0) Jul 13, 2013 New Mexico

    Really curious to know what kind of beers those 1500+ breweries brewed in the late 1800s. Surely there were some creative Belgian immigrants brewing a nice Lambic, right? It couldn't all have been American Pilsners.
     
  19. evilcatfish

    evilcatfish Defender (610) May 11, 2012 Missouri
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    I think it is awesome that we have reached 3000. Who would have ever thought?

    That said, I feel like the market is becoming close to saturated. Plus, a lot of the new breweries seem to be overlooking the basics in favor of doing over the top, one off beers. My respect is earned by brewing a consistantly good pale ale, not a BA spicy soured apple pie stout
     
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  20. jesskidden

    jesskidden Poo-Bah (1,969) Aug 10, 2005 New Jersey
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    I don't understand your point here. "Immigration" would be included in the per capita figure. You claimed:
    And I noted - while the number of breweries went down, per capita beer consumption and beer production went up in the period discussed in the OP - starting in 1870's, the previous peak of total US breweries. As clearly shown in the graph below, the total number of breweries went down even as the population (native born and immigrant) increased, and beer production increased even faster than the population.

    [​IMG]
    above from The American Brewing Industry and The Beer Market [1958]
    ---Click image for larger view---​
    It was not until the 1910s that production went down, a combination of WWI and the resulting anti-German sentiment in the US (exploited by the Temperance forces), the grain shortages and grain rationing due to the War, which led to the Lever Act (outlawing beer over 2.75%) and then Wilson's so-called Wartime Prohibition proclamation that preceded the 18th Amendment's National Prohibition and the Volstead Act.

    The Temperance movement obviously did affect certain local regions and states before that, but on a national level it wasn't until the final decade before Prohibition that it had a notable negative affect on the brewing industry's production and numbers.
     
    #20 jesskidden, Jul 14, 2014
    Last edited: Jul 14, 2014
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  21. ASTMONATE

    ASTMONATE Initiate (0) Apr 23, 2014 Illinois

    Obviously out of my league for the this conversation. Thanks for the lesson though!:grinning:
     
  22. drtth

    drtth Poo-Bah (4,006) Nov 25, 2007 Pennsylvania

    I think the recent surge in brewery openings may be too new for there to be much data specifically on closure of small breweries.

    While I haven't seen anything specifically on small brewery startups yet, there are numbers out thre that suggest the first year closure/failure rate will be 25% or more, with about 50% or more of startups not being around after 4 years (there is also a nice listing of what seem to be the causes of startup failures):
    http://www.statisticbrain.com/startup-failure-by-industry/

    Also, for some contexts there are reasons to think the startup failure rate may actually be as high as 75%:
    http://www.bizjournals.com/sanjose/blog/2012/09/most-startups-fail-says-harvard.html?page=all
     
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  23. bubseymour

    bubseymour Poo-Bah (2,902) Oct 30, 2010 Maryland
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    For every high quality output small brewer in a given local area there are 5+ very pedestrian ones I'm finding. I see alot of pluses and minues of brewers at the local level coming in the near future as people begin to give up on pedestrian ones and chase the next local offering, just like restaurants.
     
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  24. drtth

    drtth Poo-Bah (4,006) Nov 25, 2007 Pennsylvania

    There are also lots of areas with no small breweries just waiting for one. There are reasons to think some of the growth is into those areas.
     
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  25. Providence

    Providence Crusader (746) Feb 24, 2010 Rhode Island

    Interesting stuff, thanks. How did Miller and Coors become so popular? That's probably a somewhat complicated question to answer, but I couldn't help wondering as I read your post.
     
  26. bubseymour

    bubseymour Poo-Bah (2,902) Oct 30, 2010 Maryland
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    That's a valid point. I just feel the localism small-brewer thing is really just supported by trendiness as in this day in age since we have nationwide distribution and can comparison shop with ease. Not like 1880, when the local brewery was your only beer drinking option in a 30+ mile radius thus why 1000+ existed back then across the country. Buying local is 10% freshness related and 90% hype-train related IMO.
     
  27. hopfenunmaltz

    hopfenunmaltz Meyvn (1,491) Jun 8, 2005 Michigan

    The Brewers Association tracks those data also. Scroll down on the page.
    http://www.brewersassociation.org/statistics/number-of-breweries/
     
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  28. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    Very few production brewery failures.

    Year/Starts/Closings
    2013 304 20
    2012 340 19
    2011 220 16
    2010 100 13
    2009 71 15
    2008 59 15
    2007 60 22
    2006 38 14
    2005 27 18
    2004 28 13

    Less than 10% is damn good in any industry. Brewpubs havent done nearly as well, because, restaurant.
     
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  29. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    Yeah, Ive thought its clear from that graph that prohibition had little effect on the totals. It may have chose winners and losers, as the ones who could survive on not-beer were around post-pro, but the total wasnt really changed.

    It
     
  30. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    For completion, thought I would add in brewpub numbers.

    Year/Starts/Closings, as above
    2013 109 24
    2012 110 28
    2011 88 28
    2010 63 51
    2009 49 43
    2008 70 50
    2007 65 56
    2006 63 43
    2005 48 66 (yikes!)
    2004 67 96 (double yikes!)
     
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  31. hopfenunmaltz

    hopfenunmaltz Meyvn (1,491) Jun 8, 2005 Michigan

    Those from 2004 and 2005 were at the end of the bust that started in the late 90s. We are in boom times now.
     
  32. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    Yeah, Im well aware. I think the 2003 and 2002 numbers are even worse.

    And yup:

    2001 66 75
    2002 36 100 <---ouch
    2003 66 71

    for production breweries:

    2001 20 36
    2002 19 22
    2003 25 15

    Production breweries turned the corner in 2003.
     
  33. azorie

    azorie Champion (892) Mar 18, 2006 Florida

    Sounds like a lot of little German Americans grew up and started drinking...lol
     
  34. azorie

    azorie Champion (892) Mar 18, 2006 Florida

    I think its really about 25 to 1 or more personally. Of course I can only speak from my personal experience and my thoughts on how good or bad the beer is. I noticed the local factor really does influence folks. For example you can take the 10 local beers brews out of state to a impartial judging and the ratings change a WHOLE bunch.... If you get my drift.

    just a random thought.
     
  35. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    But isnt that true of anything? Take 25 local pizza places...how many are exceptionally good? And how many would an out-of-towner be wowed by? But they still have local customers dont they?
     
  36. MNAle

    MNAle Poo-Bah (1,731) Sep 6, 2011 Minnesota
    Society

    For awhile, they do. Restaurants have a pretty high failure rate, though.
     
  37. rlcoffey

    rlcoffey Initiate (0) Apr 20, 2004 Kentucky

    Yes they do. But I know of plenty of places that have been around forever that I wonder why anyone goes there. The point being, taste is subjective. And people like local atmosphere.
     
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  38. dennis3951

    dennis3951 Savant (981) Mar 6, 2008 New Jersey

    The town I live in has 12,000 people and 4 local (non chain) pizza joints. All 4 of them have folks who think they are exceptional.
     
  39. azorie

    azorie Champion (892) Mar 18, 2006 Florida

    Great is great is it not? Westvleteren is local really local....but folks come from 1000's of miles away. for 3 beers, well 1 or 2 really. me I love all 3.

    the point was 1 in 25 will survive the shake out, or the market will really change from BMC, to back to regional and local "good" beer. That is if the locals can afford it.
     
  40. marquis

    marquis Crusader (797) Nov 20, 2005 United Kingdom (England)

    There is plenty of room for further expansion ,we have 1300 breweries in the UK serving a population of 60 million.Though a far cry from the 30000 in the 19th century it seems a lot.
     
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